Time marches on and prices go up. This includes house prices in Portugal, which are getting higher and higher. Property prices rose another 3.3% in the first three months of 2019, compared with the last quarter of 2018, settling at 1,849 euro per square metre, which is 172 euro per square foot, according to the latest idealista price index. This is an increase of 17% year-on-year.
All Portuguese regions saw a price increase in quarterly terms, with the exception of the Central region and the Autonomous Region of the Azores, which showed decreases of 4.7% and 5.7%, respectively. Also noteworthy is the North region, where prices grew by 4.6%. After the North come the Autonomous Region of Madeira (+3.7%), the Metropolitan Area of Lisbon or AML (+2.8%), the Algarve (+0.6%) and Alentejo (+0.5%).
Not surprisingly, the AML continued to be the most expensive region in Portugal to buy a house between January and March, with each square metre costing 2,637 euro (245 euro/sq ft). Next are the regions of the Algarve, where housing prices already cost 2,072 euro/m2 (192 euro/sq ft), the Northern region (1,512 euro/m2 or 140 euro/sq ft) and the Autonomous Region of Madeira (1,493 euro/m2 or 139 euro/sq ft).
The Autonomous Region of the Azores (849 euro/m2 or 79 euro/sq ft), the Centre (981 euro/m2 or 91 euro/sq ft) and the Alentejo (1,026 euro/m2 or 95 euro/sq ft) are the cheapest regions.
Real estate prices rose in 15 of the 24 Portuguese districts analysed, including the islands of Madeira and the Azores, with the largest increases taking place in Porto (4.6%), Castelo Branco (4%) and Madeira (3.6%). In the case of Lisbon, the increase was 2.2%.
On the other hand, the islands of Terceira, Leiria and Pico recorded the largest price drops: -6.1%, -5.9% and -4.1%, respectively.
The ranking of the most expensive districts continues to be led by Lisbon (3,002 euro/m2 or 279 euro/sq ft), followed by Faro (2,072 euro/m2 or 192 euro/sq ft) and Porto (1,728 euro/m2 or 161 euro/sq ft). The houses for sale with “more affordable” prices are in Guarda (615 euro/m2 or 57 euro/sq ft), Bragança (676 euro/m2 or 63 euro/sq ft) and Castelo Branco (680 euro/m2 or 63 euro/sq ft).
District Capitals and Cities
Prices rose in 16 district capitals, with Castelo Branco (4.8%) leading the list. This was followed by Setúbal (4.4%), Guarda (4.2%), Braga (4%) and Évora (3.8%). In Lisbon the increase was 2.2% and in Porto 2.1%.
Where did prices go down the most? In Vila Real (-18.1%), Coimbra (-2.9%) and Viana do Castelo (-2.7%).
Lisbon is still the Portuguese city where it is most expensive to buy a house, with an average price of 4,263 euro per m2, or 396 euro per sq ft. The second and third places go to Porto (2,677 euro/m2 or 249 euro/sq ft) and Faro (1,753 euro/m2 or 163 euro/sq ft). The cheapest capital cities of Portuguese districts are Guarda (674 euro/m2 or 63 euro/sq ft), Castelo Branco (682 euro/m2 or 63 euro/sq ft) and Vila Real (691 euro/m2 or 64 euro/sq ft).
Note: The city of Leiria saw a decrease in prices but was deemed an outlier due to a change in the sample, thus not being representative. This data was not used for the study.
The idealista property price index’s new methodology
As of the first quarter of 2019, idealista has updated the methodology it uses for creating price reports. After the incorporation of idealista/data, new calculation formulas have been included that make the analysis of price developments even more robust, especially in small areas. To avoid inconsistencies in our historical series, the data from 2007 have all been recalculated with the new methodology.
On the recommendation of the idealista/data statistical team, we updated our formula to find average prices with a greater degree of certainty. As well as removing unrepresentative listings with non-market prices from the study, we calculated the median value instead of the mean value. With this change, in addition to further refining our report to align with current market trends, we standardise our methodology with those applied in surrounding countries to obtain real estate data.
From now on, we include the typology of single-family homes and we discard any type of property that has been in our database for a long time without seeing any interaction from users. The report continues to be based on asking prices published by advertisers on idealista.
The full report is available in Portuguese on the idealista website.